What the “Deep State” Is Really Up To

RANCHO SANTANA, NICARAGUA – Here at the ranch, the days go by quickly.

A walk on the beach. A long, slow afternoon… reading, writing… listening to the waves.

Dinner under the stars.

But back in the U.S.… more blow-ups… more contretemps, confusion, and chaos…

What is really going on?

“De Facto Coup”

Over the weekend, the term “Deep State” lit up the search engines.

Yesterday, Google counted more than 32 million inquiries.

There were features on the Deep State – the “shadow government” that runs the country no matter who’s in power – in The Washington Post, The New York Times, The Atlantic, and The New Yorker.

The Trump administration, too, has been focusing on the Deep State. White House Press Secretary Sean Spicer:

I think that there’s no question when you have eight years of one party in office, there are people who stay in government – and continue to espouse the agenda of the previous administration.

So, I don’t think it should come as any surprise there are people that burrowed into government during eight years of the last administration and may have believed in that agenda and want to continue to seek it. I don’t think that should come as a surprise.​

Meanwhile, news website Breitbart (formerly run by President Trump’s chief strategist Steve Bannon and closely connected to the Trump White House) claims the Obamistas are staging a “de facto coup” against Team Trump.

What to make of it?

Seriously Ignorant

On Friday, we bent to a tough job.

Our hands shook as we put on our glasses. Our knees cracked as we stooped to wonder: Is there any Truth in public affairs?

What we came to understand is that, often, there is none.

Ignorance is one of our charms here at the Diary. Not that we are more ignorant than others; we just take it more seriously.

We appreciate it. And since we are so chummy with ignorance, we see it everywhere. In every headline. Every public announcement. Every speech on the floor of the Senate… and every crackpot comment from every halfwit voter in the empire.

If something happened in your backyard yesterday, in broad daylight, you might know something about it. Or if you tell us about your life… about your people and how they live…

We will listen with both ears.

But give us the unemployment rate. Tell us why Rome fell. Explain the Virgin Birth…

Go ahead. We need a laugh.

Give us a skunk, flattened out on the highway. We will have a fairly good idea of what happened. With a little imagination, we can even guess what was going through the skunk’s mind as he put paws to pavement.

A brush fire is a real thing. It will burn your fingers. It will destroy your house.

Even with something as real as a fire, the heat diminishes fast as you get farther away from it.

An economic policy… or any sort of public “news”… has little real meaning to it in the beginning… And then what little sense it once made disappears as you move away.

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Rotten Brains

You already know our Iron Law of Truth: Any event or idea loses its real meaning by the square of the distance from it, the size of it, and the time elapsed after it.

By the time you read about it in the paper, there is hardly a trace of truth left.

“News is to the mind what sugar is to the body… The media feeds us small bites of trivial matter, tidbits that don’t really concern our lives and don’t require thinking.”

Before we know it, our brains have rotted out.

The more thoughtful pieces of news pretend to tell you something important. But often, the real information content is low, misleading, or false.

Last week, we looked, for example, at Newt Gingrich’s comment… that the press was out to get Donald Trump because “he is determined to pursue an agenda which benefits the American people instead of the establishment elite [aka the Deep State].”

But by defining the Deep State as mere holdovers from the Obama era, he either misses the point or intends to mislead: The Deep State doesn’t care what party is in power.

It doesn’t care what agenda President Trump is supposed to be determined to follow. It doesn’t care what Sean Spicer… or Newt Gingrich… or Breitbart says.

The Deep State is non-partisan, non-denominational, and gluten-free. It is whatever it has to be to survive and flourish, no matter what the headlines say… and no matter who sits in the Oval Office.

“Just keep the money flowing. You can think whatever you want,” the Deep Staters say.

Funding for the Deep State

Inside sources say, for example, that Trump’s anti-trade agenda, headed by the obnoxious crackpot economist Peter Navarro, may already be in retreat.

This is almost surely a good thing; there is no theory or experience that shows limiting trade helps people prosper.

But that’s not really why he’s being sidelined. The Financial Times reports that Navarro is being edged out – not by the Obama leftovers, but by the Goldman guys Trump put in his administration.

The Wall Street contingent knows how the game works: Yes, the U.S. imports more than it exports. And this results in a trade deficit. But the difference is what keeps the fake-money system going and funds the Deep State.

It works like this…

The U.S. “prints” fake dollars and sends them abroad to pay for its imports.

These dollars wind up as foreign exchange reserves in countries that run trade surpluses with the U.S.

Then, instead of just holding the dollars as reserves, these trade-surplus countries use them to buy U.S. financial assets – mainly Treasury bonds – from Wall Street.

This may be bad for Main Street. But it’s great for Goldman Sachs and the rest of the Establishment Elite.

[New readers, please stay tuned – tomorrow we will retrace our steps… and bring you more fully into the conversation.]

Answering the rumors of internal battles, the Trump Team issued a note saying that both sides – the Goldman guys and the “America First” crony traders – were working together for the “benefit of all the American people.”

Oh?

Who benefits from the import tax?

All Americans?

What about those who buy imports? What about those who own factories overseas that export to America? Are they included in “all Americans”?

And how about those who depend on illegals to cut their lawns or build their buildings?

Just so it is clear: Team Trump is not talking about all Americans. Some Americans will benefit… at others’ expense. Just like they did under Bush, Obama, and Clinton.

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Mailbag

The debate over health care continues in today’s mailbag, following Canadian reader Ed L.’s claim that you can’t be a First World country without publicly supported health care.

Oh, great! Let’s “piss off” the doctors, or better yet, run the really good ones off and disincentivize those contemplating entering the profession. Great idea.

Equality of outcome means everybody meet at the bottom. See: Cuba. And can’t we, for once, learn to differentiate between healthcare and health insurance? How expensive would your car insurance be if it had to cover wiper blades, oil changes, spark plugs, fuses, and other maintenance basics?

We’re in this pickle, because we listened to and believed politicians, all of ‘em. When you delegate thinking, and you buy into the something-for-nothing scam (fiat money), the trouble starts.

– Paul M.

When I got out of the USAF in 1970, my wife was eight months pregnant with our first child. They were supposed to extend our coverage 90 days on release, and Congress reneged at the last minute and we were stuck. So we had to SUCK IT UP. It really hurt!

Took me years to pay it all back, but we did. I went into the insurance business and sold Health and Life. And always made sure I bought it for my own family after my first experience of being slammed with a huge hospital bill for 10 days and C-section.

I made hundreds of sales calls. Thousands really. Some bought. Some didn’t. Guess what? The world didn’t come to an end! How did life exist without Obamacare? Oh my! "Poor Unfortunate souls!" (Disney, get it?)

I took advanced courses in underwriting. It is a very practical science. We used to say, “Figures don’t lie, but liars figure.” That part is still true. Liars are still figuring how to game the system. Anyone who knows Underwriting 101 knows the whole 2017 discussion is bogus.

– Lou S.

Regarding fellow Canadian Ed L.’s take on the Canadian system, I agree with Ed up to a certain point. In my younger days playing sports and sustaining injuries, the system was great. But as I see my father struggling with health issues, waiting close to [a] year at a time to see specialists, I start to disagree.

My father had degenerative discs in his lower back. By the time he eventually saw a specialist, all they did was suggest cortisone injections (which the system couldn’t seem to get figured out as to where he could get them). Then through family contacts he found a German clinic that specialized in back surgeries for this type of issue. Within one week of contacting them he was having surgery. The clinic took care of everything (flights, hotels, physio, massage, nursing, occupational therapy, etc.). Granted, it was not cheap. But that would never have happened in Canada, and I would hate [to] think where my father would be now (physically and emotionally).

– Parry B.

For the Canadian who wrote in to say that “the society I want to live in looks after its sick (and its elderly)”… I couldn’t agree more with that statement or disagree more that using politics to provide it is the answer.

Government is the institution that interns aliens, interns citizens by ancestry, takes care of animals by euthanizing them by the millions, experiments on soldiers with viruses and vaccines (e.g., giving them syphilis), tells people to eat more corn and corn syrup (the “food pyramid” and corn subsidies), claims to own the rain water that falls on one’s own property, prohibits consuming raw milk, and spies on us in every way possible. If that were my idea of “society,” you could call me “anti-social.”

Society should take care of the sick and elderly, and leave politics and bureaucrats out of it. Society can lower costs by cutting out the government middle-men and political overhead costs and supporting charities. Politics is not humane, but society can be.

– Sandra K.

In Case You Missed It…

This Wednesday is a crucially important date for Americans, especially those who have any money in the stock market. You see, in just two days, the debt ceiling deadline will hit, and the Treasury could run out of money. On top of that, the Fed will meet to discuss an interest rate hike.

Together, these events are likely to kick off a massive crisis in U.S. markets. That’s exactly why Bill’s longtime friend and colleague Doug Casey and his team put together this urgent video… to help you navigate the markets in crisis. You can watch it here.